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Q & A on Economic and Demographic Aspects of the Reproductive Health Bill

Q & A on Economic and Demographic Aspects of the Reproductive Health Bill

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Economic and Demographic Aspects of the Reproductive Health Bill: A Question and Answer Primer By Dr.

Roberto de Vera* 8 September 2012
1. Is our population growing too fast? Some persons point out that we need to manage the Philippine population because it is simply growing too fast for its own good (without clearly stating why). For if we don’t, they warn, that that the population will reach 184 million in 2040, double the 92 million in 2010. We shouldn’t worry about this at all since this figure is way above the UN high variant projection of 155 million for 2040 which can be found in the UN’s online database World Population Prospects: the 2010 Revision. Why the wide difference? On one hand, the ‘population doubles’ projection assumes that the 1995-2000 annual population growth rate of 2.36% will hold steady for the next 30 years. On the other hand, the High Variant Projection of the UN 2010 Revision of the World Population Prospects assumes that these growth rates will come down from 2.03% in 2000-2005 to 1.46% in 2035-2040. The latter assumption seems to be more reasonable since Philippine annual population growth rates have been decreasing: from 3.06% in 1948-1960 down to 2.36% in 1995-2000. Based on the last two censuses, it has gone down further: 2.04% in 2000-2007 and 1.53% in 2007-2010. What people don’t realize about increasing population is that it is caused by less babies dying and more people living longer. Peter Bauer has written: “Clearly, the muchdeplored population explosion…should be seen as a blessing rather than a disaster, because it stems from a fall in mortality, a prima facie improvement in people’s welfare, not a deterioration.” For instance, infant mortality rates in the Philippines (i.e. the number of deaths per 1,000 births one year of age or younger) have gone down from 96.8 in 1950-55 to 35.1 in 1994-1998 and further down to 24.9 in 2004-2008. Life expectancies from birth have increased in the 1950-2002 period: from 54.1 to 66.9 for males and from 56.7 to 72.2 for females.1 2. Does a faster annual population growth rate mean a slower annual growth rate in income per person (or more commonly measured as per capita Gross Domestic Product (GDP))? Several studies have shown that there is no clear link between population growth and economic growth. Nobel prize winner Simon Kuznets’s pioneering study contained in his 1966 book Modern Economic Growth: Rate, Structure and Spread (pp. 67-68) showed that “[n]o clear association appears to exist in the present sample of countries,
* Assistant Professor, School of Economics, University of Asia and the Pacific, Pearl Drive, Ortigas Center, Pasig City, Philippines 1605 (roberto.devera@uap.asia)

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or is likely to exist in the other developed countries, between rates of growth of population and of product per capita.” Other studies have confirmed Kuznets’s findings in data for developed and developing countries, showing no clear link between population growth and economic growth (or poverty). Here are the findings of five studies: (i) the 1992 Ross Levine and David Renelt study of the relationship between growth and its determinants found no significant effect of population growth on economic growth; (ii) the 1994 Jeff Kling and Lant Pritchett study arrived at a similar finding where they allowed the effect of population growth on economic growth to vary according to the level of development and resource scarcity; (iii) in a 1996 review of the population growth-poverty relationship, Dennis Ahlburg points out that studies have showed population growth has little or no direct effect on poverty; (iv) in a 2004 study examining the determinants of long term growth, Xavier Sala-I-Martin, Gernot Doppelhofer and Ronald Miller found that average annual population growth from 1960-1990 was not robustly correlated with economic growth; (v) the 2007 Eric Hanushek and Ludger Woessmann study found that total fertility rates, which can be seen as an alternative measure of population growth, did not have a statistically significant association with economic growth. Similar conclusions have been arrived at by the US National Research Council in 1986 and in the UN Population Fund (UNFPA) Consultative Meeting of Economists in 1992. Moreover, these studies support Kuznets’s explanation of why no direct relationship could be expected between population growth and economic growth. Population growth and economic growth are linked through “a common set of political and social institutions.” Thus, any “direct causal relation” between them “may be quite limited.” Moreover, any relationship that is measured cannot be used as a basis for managing population to affect economic growth. It important to note that even if there are recent econometric studies that show that population growth is negatively correlated with per capita income growth in the Philippine case (i.e. an increase in the population growth rate leads to a decrease in per capita income growth rate), these studies cannot conclude that higher population growth rates causes lower per capita income growth rates. It is more probable that there are intervening factors such as those mentioned by Kuznets that may cause economic

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growth. Thus, these studies cannot serve as bases for a policy that aims to reduce population growth to raise per capita income growth. 3. If population growth doesn’t affect economic growth, what will? Good governance and well-implemented economic policies raises economic growth which is needed to reduce proverty. In 2008, a Commission on Growth and Development led by Michael Spence, a Nobel Prize winner in Economics, identified five ingredients for sustaining rapid growth and inclusive development. These high growth economies: i) exploited the world economy; ii) kept macroeconomic stability; iii) achieved high rates of savings and investment; iv) let markets allocate resources; and v) had committed, credible and capable governments. Note that the study didn’t mention population management as one of the ingredients of sustaining high economic growth rates. In his book, The Ultimate Resource 2 Julian Simon gives evidence for the crucial role that good governance and economic policies play in economic growth when he compares three pairs of countries that have the same culture and history and practically had the same standard before they split after World War II—East and West Germany, North and South Korea, and Taiwan and China. In 1950, both the communist and noncommunist countries had practically the same birthrates and the centrally planned economies had less population pressure than their market-directed counterparts as measured by population per square kilometer. Yet the economic growth of West Germany, South Korea, and Taiwan was better than their counterpart centrally planned economies. Due to faster economic growth, personal incomes in Taiwan and South Korea were roughly double China and North Korea, respectively while those in West Germany’s was more than 10% larger than East Germany in the early 1980s.
Table 1. Population density, 1950 and real income per capita, 1950, 1980, and 1982 for selected countries* East Germany 171 2,943 9,914 North Korea 76 193 817 China West Germany 201 2,943 11,032 South Korea 212 193 1,611 Taiwan

Population density, 1950** Real gnp per capita, 1950*** Real gnp per capita, 1982 Population density, 1950 Real gnp per capita, 1950 Real gnp per capita, 1982

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Population density, 1950 Real gdp per capita, 1950**** Real gdp per capita, 1980

57 300 1,135

212 508 2,522

*The figures for this table are taken from Tables 34-1a and 34-1b in Julian Simon. 1996. The Ultimate Resource 2. Revised Edition. Princeton, New Jersey: Princeton University Press, p. 496. **in persons per square kilometer ***Figures for real gross national product (gnp) per capita are based on 1981 constant US dollars. ****Figures for real gross domestic product (gdp) per capita are based on 1975 international prices. Source: Population density: United Nations Educational, Scientific, and Cultural Organization, UNESCO Yearbook (1963, pp. 12-21). Real GDP per capita: Summers and Heston Data Set (1984). Real GNP per capita: International Reconstruction and Development (IBRD), World Tables (1980). GNP deflator: Council of Economic Advisers (1986, Table B-3).

Shao Hua Chen and Martin Ravallion have estimated that China has been able to lift over 400 million of its citizens out of poverty from 1981 to 2001. Matleena Kniivila explains that China has been able to do this through economic reforms which include: a) allowing farmers to market and sell their produce left over after meeting their reduced state-quotas; b) allowing foreign investments to come in; c) establishing special economic zones in coastal cities. 4. Does a larger population mean more hungry and malnourished people? No. On the contrary, the Food and Agricultural Organization (FAO) statistics indicate that the food supply available for consumption has increased and the historical trend shows it can continue to outpace population growth in the future. The FAO statistics for the Philippines from 1961 to 2002 show that the food supply available for consumption increased in three categories: i) calories per person per day: from 1,745.0 to 2,379.3; ii) grams of protein per person per day: from 40.6 to 56.1; iii) grams of fat per person per day: from 28.7 to 48.4. These national trends follow world trends. Based on food and nutrition statistics in FAOSTAT, the online FAO internet database, we find that from 1961 to 2002, available world food supply per person has gone by 24.4% and enough food food is being produced for everyone on earth to enjoy a healthy diet. The FAO reports in The State of Food and Agriculture 2003-2004: “ Over the past two decades, progress has been made in reducing undernourishment in developing countries. The incidence of undernourishment has decline from 28 percent of the population two decades ago to 17 percent according to data from 1999-2001.”

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These trends of food supply outpacing population growth clearly prove Ester Boserup’s point in her 1965 book The Conditions of Agricultural Growth: that it is population growth that causes increases in food production and not the other way around. Her argument can be paraphrased as follows: Population growth puts pressure on communities who acquire food through hunting and gathering, slash-and-burn farming methods, and other inefficient methods to adopt more efficient ones such as plowing with livestock and multi-cropping. As populations grow, towns develop and people can specialize in other non-farming production activities. This is the result of farmers, being pressured by a growing population, to produce more food with more efficient methods to serve a larger demand. If the statistics show that food supply is adequate to give every Filipino a healthy diet, why are some families still eating less? For instance, FAO’s The State of Food and Agriculture 2007 shows that the incidence of undernourished people in the Philippines to be 17% in 2001-2003, lower than the 26% recorded in 1990-1992. The FAO argues in their report World Agriculture: Towards 2015/2030 that families that are eating less have heads that are not able to get good paying jobs to pay for foodstuffs. Or that they live in poor, isolated communities dependent on agriculture and are unable to raise local agricultural production to meet their food needs. In some cases, it may, in fact, be sparse population that makes it difficult for people to access food supplies. This was the case of the famine in Sahel, West Africa in the 1970s. Because of the region’s low population density, not enough roads and transport services were made available in the area. In the case of the Philippines, families need to pay higher food prices due to wastages that can be avoided if there were more food processing and storage facilities. Food prices are also higher due to a fragmented transportation system, which is now being remedied by the roll-on, roll-off (ro-ro) services of the government’s Strong Republic-Nautical Highway project. Moreover, in his book The Ultimate Resource 2 Julian Simon has shown that in addition to food supply, the supply of oil, copper, aluminum and other resources have more than kept up with demands of an increasing population. Simon has shown that amid population growth, resources have become less scarce (or are in greater supply relative to the technology used to extract and to employ the resource) by showing that their prices have gone down over time. These trends bolster his argument first pointed out by Simon Kuznets, the 1971 Nobel Prize winner in Economics2: “More people, and increased income, cause problems in the short run. This increased scarcity of resources causes prices to rise. The higher prices present an opportunity, and prompt inventors and entrepreneurs to search for solutions. Many fail at cost to themselves. But in a free society, solutions are eventually found. And in the long run the new developments leave us better off than if the problems had arisen. That is, prices end up lower than before the increased scarcity occurred.” In other words, additional persons born in a democratic society mean more minds and hands to feed additional mouths, shelter and clothe additional bodies, and educate additional minds. Each additional person is a net producer of ideas and resources. This

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is proven by history wherein every larger generation has left the world in a better state for next one. 5. What causes poverty? What reduces it? Poverty is a state in which people cannot obtain the food, water, shelter, clothing, education and medicines needed to live with dignity and a humane quality of life because they don’t have the income, access and rights to get these basic necessities. The causes of poverty include a) persons unable to get well paid jobs because they didn’t have enough education and there weren’t enough jobs to begin with; and b) governments as well as civil society failing to deliver enough public services and goods such as roads, schools and health clinics because of mismanagement and corruption. To reduce poverty, governments, companies and civil society need to work together to sustain rapid economic growth for several decades and to help people get a slice of the expanded pie of jobs and businesses opportunities that result from faster economic growth. The sure-fire steps to do this include: a) raising investments in people by giving them more opportunities to get an education and investments in companies that would hire more of these educated workers; b) building infrastructure such as schools, roads, and health clinics through proper management of funds and programs; and c) protecting the rights of individuals and families necessary for civic participation and human flourishing. Since population growth isn’t directly linked with economic growth that reduces poverty, it makes more sense to spend money on programs that directly reduce poverty such as: (i) promoting microfinance: providing families with small loans helps them start or expand businesses which augments their incomes and builds their credit history for future borrowing from banks; (ii) building roads and ports: a well maintained road and port network connects people to their workplace, farmers to markets that pay a higher price for their produce and tourists to local resorts all of which raise personal well-being and incomes; (iii) investing in rural development: providing education and infrastructure in rural areas (where the majority of poor families are) raises the productivity and wages of rural workers which lifts families out of poverty and releases surplus

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rural workers for manufacturing jobs which raises wages even further. (iv) investing in people: providing people with scholarships for vocational education addresses the needs of students who are cut out for high valued blue collar work. Short training programs for business process outsourcing (BPO) jobs will help workers find well-paid jobs. (v) establishing health clinics: expanding the number of public health clinics, upgrading the capacities of midwives, and increasing the number of public sector nurses and doctors is a cost-effective way of reducing maternal, child and other deaths. (vi) building sanitation and water delivery systems: providing people with clean water and safe ways to dispose waste is proven to reduce sicknesses and deaths due to water-borne diseases. 6. The observation that many large families are poor makes some people conclude that it is too many children that causes a family to be poor. Is this a correct conclusion? No, this wouldn’t be a correct conclusion even if the evidence shows that families are more likely to be poor the larger they are. For instance, a sample of families that have reached their final family size and whose heads have full time jobs taken from the 2000 Family Income and Expenditure Survey (FIES) indicates an increasing proportion of poor families as family size increases: from 4.9% in families with no children to 59.1% in families with seven children (see Row 1 of Table 2).3
Table 2. Proportion of families that are poor and proportion of poor families whose heads had no high school diploma, by number of children, 2000.* 0 1 2 3 4 5 6 7 Proportion of families that are poor (in %) 4.9 12.5 15.4 22.1 35.8 42.3 53.2 59.1 Proportion of poor families whose heads had 90.5 84.5 88.9 84.6 78.2 81.6 83.8 82.1 no High School diploma (in %) *This sample consists of families with married household heads, aged 40-49 and held a job at the time of the survey. Families are considered when their annual incomes were below the family poverty threshold level in 2000 (P11,605 times the number of family members). Source: 2000 Family Income and Expenditure Survey; authors’ calculation

Here are two reasons why it would poor judgment on our part to use this observation as a basis for limiting the family size of poor people for two reasons. First, finding that increasing family size is associated with increasing incidence of poor families does not prove that a larger family size is what makes a family poor. The more likely reason why some families are poor is the limited schooling of the household head. In fact, 78% to 90% of the poor households in each family size had

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heads with no high school diploma (See Row 2 of Table 2). In other words, poor families are poor not because they are large but because most of their heads attended few years of schooling. Second, finding that larger families are usually poor cannot be used as a basis to conclude that poor parents cannot and do not consider the consequences of their procreative capacities. For Lant Pritchett, a professor at Harvard’s Kennedy School of Government, has found that 90% of the variation in actual fertility rates can be accounted for by variations in desired fertility rates. In other words, parents who have large families want large families; parents want the children they actually beget. Families may decide to have a large family for various reasons. First, farmers without a tractor may find it reasonable to have more children to have additional farm hands. Second, parents with no access to pension and medical care packages may have more children with the hope that one of them would take care of them in their old age. This finding that poor families have heads that lack schooling confirms the results of the 2002 Balisacan and Pernia study on poverty incidence in Philippine regions: the provision of education, together with roads, helps reduce poverty. In other words, persons get the full returns on their education only if they have access to jobs that pay good wages and to markets that pay good prices for the goods they produce. The study also showed that agrarian reform and irrigation alleviate poverty. This finding makes sense, especially in regions where agriculture is dominant. In his 2001 paper on Philippine poverty, Balisacan showed that poverty is mainly a rural phenomenon and nearly two-thirds of rural poor work in the agriculture sector. 7. Given that the government is unable to build the schools and clinics needed to meet the fast growing population, isn’t it reasonable for the government to set aside funds to give information on contraceptive methods to parents and to give it without charge for those who can’t afford them? No, it would not be reasonable to set aside funds to give information on contraceptive methods to parents and to give it without charge for those who can’t afford them. Here are two reasons. First, most married women are aware of a fair number of contraceptive methods which they can choose from. This conclusion applies to married women of all levels of wealth and education. Figures from the 2008 National Demographic and Health Survey (NDHS) based on interviews with 8,418 women 15-49 years of age, published by the Philippine National Statistics Office, show that: (i) 98.9% of married women knew at least one contraceptive method and knew an average of 8.1 methods; (ii) 97.8% of married women knew the pill; 93.9% knew condoms; 91.1% knew injectables; 89.6% knew female sterilization; 86.6% knew the Intra-Uterine 8

Device (IUD); (iii) 95.6% of married women in the lowest wealth quintile (i.e. the poorest 20% of Filipino families) knew at least one contraceptive method; 99.2% in the second wealth quintile; 99.9% in the middle wealth quintile; 100.0% in the fourth wealth quintile and 99.8% in the fifth wealth quintile (i.e. the richest 20% of Filipino families); (iv) 98.2% of married women who have at least one year of elementary education to an elementary diploma knew at least one contraceptive method; 99.5% of married women who have at least one year of high school education to a high school diploma knew at least one contraceptive method; 100% of married women who have at least on year of college education to a college diploma or more knew at least one contraceptive method (v) except for the Autonomous Region of Muslim Mindanao (ARMM) where 82.6% of married women knew at least one contraceptive, 95.9% to 100.0% of married women in the rest of the regions knew at least one contraceptive method. Moreover, the majority of married women complement their theoretical knowledge of contraceptive methods with a practical knowledge. The 2008 NDHS shows that 77% of married women have used a contraceptive method. Second, the same survey shows that the majority of married women (71.4%) are convinced of the need to use a contraceptive method: 50.7% of married women are using a contraceptive method now and 20.7% of married women not using a contraceptive method now are going to use it in the future. Moreover, it is important to note that a mere 0.84% of all married women won’t use them now and in the future either because they can’t afford them (0.58%), they can’t access or don’t know where to get them (0.16%), or they don’t know which methods to use (0.05%). The other 25.33% of married women who are not using a contraceptive method now and in the future gave other reasons which include the top four reasons in the following order: they had health concerns; they want as many children as possible; they were on menopause or had a hysterectomy; they feared side effects In short, there is no need for the government to set aside an initial amount of P3 billion pesos to fund the provisions for contraceptive method information and free access of the proposed RH bill when the 2008 NDHS figures show that most women who need contraceptives know what methods are available, know where to get them, and have enough money to buy them. It would be better to spent in providing for the real and immediate needs of the Filipino people. For example, instead of spending P3 billion year for the next five years to fund the annual supply of pills of 366,300 women for five years (most of whom could

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buy them on their own), we could this spend this same amount on any four projects: i) to build 19,892 classrooms which would serve 895,140 students (i.e. this would wipe out the 2,053 classroom backlog of Eastern Visayas nine times over); ii) to pay the salaries of 12,500 teachers a year for five years; iii) to construct the 107,142 houses which would give homes to 535,710 Filipinos (this would be more than five times President Aquino’s program of building 20,000 houses for low-salaried personnel which they would be amortize over 30 years) iv) to pay the salaries of 12,500 skilled birth attendants for five years whose increased presence in the delivery of births has been identified by the Department of Health as major factor in reducing maternal deaths; 8. If more densely-populated countries and regions leave families with smaller plots of land and less resources, then this makes it more likely that countries and regions will be poorer. Is this true? No, it isn’t true. Take the case of the Philippines against other countries with higher and lower population densities. On one hand, Hong Kong, China and Singapore are more densely-populated but are richer than the Philippines (See Table 3a). On the other hand, Zimbabwe and Ethiopia are less densely populated but are poorer than the Philippines (See Table 3b). Now, these cases aren’t being presented to argue that countries get richer as they get more densely populated. The point being made is that it is good governance and economic policies rather than high population densities that make countries richer.

Table 3a. Population density, 2010 and Per Capita GDP (adjusted for Purchasing Power Parity (PPP)4), 2009 for selected countries 2010 Population Density 2009 Per Capita GDP PPP (Persons per Sq.Km) (2009 US$ per person) Belgium 341 36,800 Hong Kong, China 6,422 42,800 Netherlands 39,500 404 Japan 336 32,700 Singapore 6,745 52,200 Israel 354 28,400 South Korea 488 28,100 Philippines 333 3,300 Source: CIA World Factbook 2010, Author’s calculations Table 3b. Population density, 2010 and Per Capita GDP (adjusted for Purchasing Power Parity (PPP)), 2009 for selected countries* Country

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2010 Population Density 2009 Per Capita GDP PPP* (Persons per Sq.Km) (2009 US$ per person) Philippines 333 3,300 Uzbekistan 62 2,800 Zimbabwe < 100 30 Cameroon 41 2,300 Senegal 63 1,600 Kenya 69 1,600 Zambia 18 1,400 Ethiopia 80 900 Source: CIA World Factbook 2010, Author’s calculations

Country

At the regional level, we find that the more densely populated regions of Calabarzon and Central Luzon are richer—as measured in a lower poverty incidence—than the regions of Caraga, ARMM and Zamboanga Peninsula (See Figure 1). Again, this case isn’t being made to argue that regions get richer (or lower their poverty incidence) when they get more densely-populated. A more probable explanation of lower poverty incidence in Calabarzon and Central Luzon due to its more educated population—as measured by lower share of non-high school graduates in the population aged 20-59 (See Figure 2).

Figure 1. Poverty Incidence versus Population Density, by Region except NCR, 2003
50%

Caraga Mimaropa
40%

ARMM
Zamboanga Peninsula

Bicol N. Mindanao W. Visayas Central Visayas Ilocos

E. Visayas
30%

Soccsksargen CAR Davao

20%

Cagayan Valley
10%

Central Luzon

Calabarzon

0% 0 20 40 60 80 100 120 140 160

Source: National Statistical Coordination Board (NSCB), National Statistics Office (NSO), , Author’s calculations

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Figure 2. Poverty Incidence versus Educational Attainment, by Region, 20035

50%

Caraga Bicol N. Mindanao W. Visayas Ilocos
20%

ARMM Zamboanga Peninsula Mimaropa E. Visayas

40%

30%

Soccsksargen Davao

CAR

Central Visayas Cagayan Valley

Calabarzon
10%

Metro Manila

Central Luzon

0% 0% 20% 40% 60% 80%

,

Source: National Statistical Coordination Board (NSCB), National Statistics Office (NSO), Author’s calculations

9. Some people think that passing a Reproductive Health/Responsible Parenthood bill that proposes the ideal two-child family size6 would encourage families to choose to have smaller families. A slower population growth rate would raise economic growth. If population growth rates get too low to replace our population, incentives for having babies can be offered to bring back population growth to healthy levels. Is this true? No, this isn’t true at all. Good governance and well-implemented economic policies, and not reproductive health/responsible parenthood laws that encourage smaller families, are the time-tested ways of raising economic growth which reduces poverty. These policies include i) investing in the education and health of people so that they can get a slice from the expanded pie of job and business opportunities resulting from faster economic growth ii) investing in companies and rural areas which generates more jobs and raise workers’ productivity and wages.

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Table 4. Total fertility rates (TFR) and population, 2010, and projected population change, 2010-2050 in selected countries Country TFR 2010 Population (in millions) 127.4 141.9 45.9 81.6 48.9 21.5 23.2 7.5 11.2 7.3 9.5 4.6 10.0 Projected Change 2010-2050 (in millions) -32.2 -15.2 -10.6 -10.1 -6.6 -3.3 -1.7 -1.6 -1.5 -1.4 -1.2 -1.0 -1.0

Japan Russia Ukraine Germany South Korea Romania Taiwan Bulgaria Cuba Serbia Belarus Georgia Hungary

1.4 1.5 1.5 1.3 1.2 1.3 1.0 1.6 1.6 1.4 1.4 1.7 1.3

Source: 2010 World Population Data Sheet: Author’s calculations

The population history of countries which have implemented a government-sponsored two-child policy (or a one-child policy in the case of China) or which have simply made contraceptives available in the market have seen their population growth rates slow down to the point that many of these countries are seeing a declining population. Whether government policies made contraceptive use mandatory or voluntary, they had the unintended effect of families undershooting the ideal two-child family size: most of them had either one child or none. For example, the population of Japan and Russia are projected to lose 32 million and 15 million, respectively, from 2010 to 2050. Over the same period, the populations of Ukraine and Germany will lose over ten million (See Table 4). The average number of babies that women have in their lifetime is called the total fertility rate (TFR). When women are giving birth to less than 2.1 babies in their lifetime (which is the total fertility rate needed for a society to maintain its present population, and is technically called the replacement TFR), then their societies are producing succeeding generations which are smaller than the previous ones. For example, German and Romanian women were having an average of 1.3 babies in 2010 (See Table 4). Below replacement fertility rates are closer to home than we think. The 2008 National Demographic Health Survey shows that the richest 20% of Filipino families had a below replacement total fertility rate (TFR) of 1.9. This means that 20% of Filipino families are not having enough babies to replace themselves and this is happening even without the help a reproductive health law in place. In other words, a smaller generation of workers is paying and caring for its elderly

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generation which has retired from the workforce and it has reached crisis proportions in terms of shortfalls in pension funds and health care workers. In January 2011, former Singapore Prime Minister Lee Kwan Yew stated in speech: “At these low birth rates, we will rapidly age and shrink…So we need young immigrants. Otherwise our economy will slow down, like the Japanese economy. We will have a less dynamic and less thriving Singapore. This is not the future for our children and grandchildren.” In February 2008, a senior minister of China admitted that the government is planning to shift from a onechild to a two-child policy “because it is damaging the economy and creating a demographic time bomb”.7
Table 5. Titles of news articles on fertility-raising programs in selected countries Mother Russia offers cash to spark baby boom The Independent, 11 May 2006 Baby-short Korea unveils slew of incentives The Straits Times, 21 July 2008 France plans to pay cash for babies The Guardian, 22 September 2005 Germans get incentives for having babies The Associated Press, 3 January 2007 Baby-short Singapore to double spending on incentives: PM Reuters, 7 December 2003

France, Russia, Germany, Singapore, South Korea are just five of the growing number of countries that are offering incentives for women to have more babies (See Table 5). The effects of these incentives have been mixed at best: total fertility rates went up as more women gave birth to babies earlier than they would have to get the “baby bonuses” but remained below the replacement fertility rate of 2.1. In 2004, Joseph Chamie concluded that the efforts of countries to raise fertility rates will not be enough to bring them back to replacement levels. In 2011, Tomas Sobotka gives a similar conclusion for Europe on the impact of fertility incentives: “The overall effects of policies on fertility rates is limited and exaggerated expectations on their potential is unfounded.” In short, if the implementation of reproductive health policies in developed and selected developing countries has lowered birth rates that cause pension fund and medical care crises which have not been reversed by fertility incentives, then it makes sense to avoid these problems by not passing the reproductive health/responsible parenthood bill. Instead, we should focus our efforts on reaping a possible demographic dividend—a stage in a population where potential workers support relatively fewer number of child and elderly dependents—by educating our people for well-paid jobs and attracting the investments needed to generate the additional jobs for the 1.1-1.2 million entrants into the workforce each year for the next 30 years.

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References: Hanushek, Eric and Ludger Woessmann (2007) "The Role of Education Quality in Economic Growth", World Bank Policy Research Working Paper 4122. Accessed at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=960379. Ahlburg, Dennis A. 1996. “Population Growth and Poverty” in Dennis A. Ahlburg, Allen C. Kelley and Karen Oppenheim Mason (editors), The Impact of Population Growth on Well-being in Developing Countries. New York: Springer-Verlag, pages 219-258. Balisacan, Arsenio M., 2001. “Poverty in the Philippines: An Update and Reexamination.” Philippine Review of Economics, Vol. 38(1), pages 16-51. Balisacan, Arsenio M., and Ernesto M. Pernia, 2002. “Probing Beneath Cross-National Averages: Poverty, Inequality, and Growth in the Philippines.” Working Paper Series No. 7, Economics and Research Department, Asian Development Bank. Accessed at http://beta.adb.org/publications/probing-beneath-gross-national-averages-povertyinequality-and-growth-philippines. Bauer, Peter T. 1998. “Population Growth: Disaster or Blessing?” The Independent Review, Vol. 3(1), pages 67-76, Summer. Accessed at http://www.independent.org/pdf/tir/tir_03_1_bauer.pdf. Boserup, Ester. 1965. The Conditions of Agricultural Growth: The Economics of Agrarian Change under Population Pressure. Chicago: Aldine. Accessed at http://www.biw.kuleuven.be/aee/clo/idessa_files/Boserup1965.pdf. Chamie, Joseph. 2004. “Low Fertility: Can Governments Make a Difference.” A paper presented to the Annual Meeting of the Population Association of America, Boston, 1-3 April 2004. Accessed at http://paa2004.princeton.edu/download.asp? submissionId=42278. Chen, Shaohua and Martin Ravallion. 2004. “How Have the World’s Poor Fared Since the Early 1980s?” World Bank Policy Research Working Paper No. 3341. Accessed at http://ideas.repec.org/p/wbk/wbrwps/3341.html. Commission on Growth and Development. 2008.The Growth Report: Strategies for Sustained Growth and Inclusive Development. Washington, D.C.: The World Bank. Accessed at http://cgd.s3.amazonaws.com/GrowthReportComplete.pdf. Cruz, Grace T. 2007. “Active Life Expectancy among Filipino Older People.” A paper presented at the 10th National Convention on Statistics, EDSA Shangri-la Hotel, 1-2 October 2007. Accessed at http://www.nscb.gov.ph/ncs/10thNCS/papers/invited %20papers/ips-26/ips26-01.pdf.

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FAOSTAT. (Online Database of the Food and Agriculture Organization of the United Nations). Accessed at http://faostat.fao.org/default.aspx. Bruinsma, Jelle, ed. 2003. World Agriculture: Towards 2015/2030: An FAO Perspective. London: Earthscan. Accessed at http://www.fao.org/docrep/005/Y4252E/y4252e00.HTM. Food and Agriculture Organization of the United Nations (FAO). 2004. The State of Food and Agriculture 2003-2004: Agricultural Biotechnology: Meeting the Needs of the Poor. Rome: FAO. Accessed at http://www.fao.org/docrep/006/Y5160E/Y5160E00.htm. Food and Agriculture Organization of the United Nations (FAO). 2004. The State of Food and Agriculture 2003-2004: Paying Farmers for Environmental Services. Rome: FAO. Accessed at http://www.fao.org/docrep/010/a1200e/a1200e00.htm. Hanushek, Eric A. and Ludger Woessmann, 2007. “The Role of Education Quality for Economic Growth”. Policy Research Working Paper No. 4122, The World Bank. Accessed at http://ideas.repec.org/p/wbk/wbrwps/4122.html. Kling, Jeff & Pritchett, Lant, 1994. “Where in the World is Population Growth Bad?,” Policy Research Working Paper Series No. 1391, The World Bank. Accessed at http://ideas.repec.org/p/wbk/wbrwps/1391.html. Kniivilä, Matleena (2007) “Industrial development and economic growth: Implications for poverty reduction and income inequality” in Industrial Development for the 21st Century: Sustainable Development Perspectives, New York: United Nations, pp. 295-332. Accessed at http://www.un.org/esa/sustdev/publications/industrial_development/full_report.pdf. Kuznets, Simon. 1966. Modern Economic Growth: Rate, Structure and Spread. New Haven: Yale University Press. Levine, Ross and David Renelt. 1992. “A Sensitivity Analysis of Cross-Country Growth Regressions.” The American Economic Review, American Economic Association, Vol. 82(4), pages 942-963, September. Accessed the World Bank Policy Research Working Paper version of this paper at http://ideas.repec.org/p/wbk/wbrwps/609.html. National Statistics Office (NSO) [Philippines], and ICF Macro. 2009. National Demographic Health Survey 2008. Calverton, Maryland: National Statistics Office and ICF Macro. Accessed at http://www.measuredhs.com/pubs/pdf/FR224/FR224.pdf. Population Reference Bureau. 2010. 2010 World Population Datasheet. Accessed at http://www.prb.org/pdf10/10wpds_eng.pdf. Pritchett, Lant, 1994. “Desired Fertility and the Impact of Population Policies.” Policy Research Working Paper Series 1273, The World Bank. Accessed at

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http://ideas.repec.org/p/wbk/wbrwps/1273.html. Sala-I-Martin, Xavier, Gernot Doppelhofer and Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813835, September. Accessed the NBER Working Paper version of this paper at http://www.nber.org/papers/w7750.pdf. Simon, Julian. 1996. The Ultimate Resource 2. Revised Edition. Princeton, New Jersey: Princeton University Press Sobotka, Tomáš. 2011. "Reproductive decision-making in a macro-micro perspective (REPRO). Synthesis and policy implications" European Demographic Research Papers 1. Vienna: Vienna Institute of Demography of the Austrian Academy of Sciences. Accessed at http://www.oeaw.ac.at/vid/download/edrp_1_11.pdf. United Nations, Department of Economic and Social Affairs, Population Division. 2011. World Population Prospects: The 2010 Revision, New York. The data tables in this book can be accessed at http://esa.un.org/wpp/unpp/panel_population.htm. US Central Intelligence Agency. 2011. The 2010 CIA World Factbook. Accessed at http://www.gutenberg.org/ebooks/35830. Appendix 1 A summary of "An Analysis of the Estimated Figure of induced abortions in the Philippines in 2000 as published in a 2006 Guttmacher Institute report by Susheela Singh et al" By Dr. Roberto De Vera In the 2006 Guttmacher Institute report "Unintended Pregnancies and Induced Abortions in the Philippines: Causes and Consequences", Susheela Singh et al estimated that there were 473,000 induced abortions completed in the Philippines in 2000 using a method consisting of three steps. First, based on reports gathered from 2,039 hospitals which contained the top ten leading causes of admission in the 19992001 period, they arrived at an estimate of the number of women in 2000 who were hospitalized due to complications from both induced and spontaneous abortions. Second, they calculated the number of women hospitalized for induced abortions by subtracting the estimated number of women hospitalized for spontaneous abortions (or miscarriages) from the estimated number of women hospitalized for induced and 17

spontaneous abortions. Finally, they arrived at the estimated number of women who had induced abortions by multiplying the estimated number of women hospitalized for complications due to induced abortions by 6 to account for the women who had induced abortions who didn't go to the hospital. We find that their method overestimates the figure of induced abortions in the Philippines in 2000 because of three flaws. These flaws had the effect of 1) overestimating the figure for women hospitalized for spontaneous and induced abortions due to an assumption that is weakly supported by statistical data; 2) underestimating the number of women hospitalized for complications due to spontaneous abortions (or miscarriages) because it mistakenly covers only those women with spontaneous abortions occurring in 12th to 22nd week of pregnancy who were hospitalized for complications; and 3) using a multiplier which most likely is higher than the ratio of the number of women who have induced abortions to the number of women who are hospitalized for complications due to induced abortions. Using modified version of the Singh et al methodology (corrected to account for the above flaws), we arrived at an alternative estimate of 25,924 induced abortions in the Philippines in 2000 (1.3 abortions per 1,000 women in the reproductive age). Using a second method, we multiplied 0.0117, the share of induced abortions to live births by the number of live births in 2000, to arrive at second estimate of 20,831 induced abortions in the Philippines in 2000 (1.1 abortions per 1,000 women of reproductive age). We consider these two estimates of induced abortion in the Philippines in 2000 to be more reasonable than the 473,000 estimate (24.5 induced abortions per 1,000 women of reproductive age) published in the 2006 Guttmacher Institute report. We recognize that our estimates do not include the “chemical abortions” that occur when abortifacient contraceptives are used which have the mechanism of preventing implantation of a fertilized egg which is an abortion. The estimates in this appendix refer to abortions made after the fertilized egg has implanted itself in the uterus.

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1Endnotes: For infant mortality rates, the 1950-55 figure comes from the World Population Prospects: the 2010 Revision; the 1994-1998 and 2004-2008 figures come from the 2008 National Demographic and Health Survey. For life expectancies, the 1950 figure comes from the World Population Prospects: the 2010 Revision; the 2002 figure comes from Cruz (2007). 2 In his 1971 Nobel Prize Lecture, “Modern Economic Growth: Findings and Reflections”, Simon Kuznets stated: “A country’s economic growth may be defined as a long-term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advancing technology and the institutional and ideological adjustments it demands.” The lecture can be accessed at: http://www.nobelprize.org/nobel_prizes/economics/laureates/1971/kuznetslecture.html. 3 The sample of families extracted from the Public Use Files of the 2000 Family Income and Expenditure Survey (published by the National Statistics Office in CD format) consists of families with married household heads, aged 40-49 and held a job at the time of the survey. Families were considered poor when their annual incomes were below the family poverty threshold level in 2000 (P11,605 times the number of family members). 4 The per capita GDP figures have been adjusted to take into consideration the relative purchasing power needed to buy a basket of goods in different countries. Moreover, these figures have been measured using 2009 US price levels. 5 The poverty incidence figures were taken from the NSCB website described in endnote 5. The educational attainment of workers in the region measured in the percentage share of the population 20-59 years of age was calculated from figures taken from the table “Table A. Percent Distribution of Population 6 Years Old and Over by Age Group, by Highest Educational Attainment and Region, Philippines: 2003” at the NSO website (at http://census.gov.ph/data/sectordata/2003/fl03tabA.htm). 6 Unplanned births are interpreted as the unmet need of women who would use contraceptives if they had the chance to do so. So, as its proponents argue, by encouraging a two-child policy and contraceptive access, a reproductive health law is designed to meet this need. We find that this line of reasoning of those who push for a two-child ideal family size flawed for two reasons. First, measures of unmet need, which are used to estimate desired fertility and ideal family size, are unreliable. Lant Pritchett, a professor at the Harvard Kenney School of Government, pointed out in 1994 that the figure for “unmet need” for contraception lumps together all women who might not want a child immediately and are not using contraception. These women, however, would include those who may be infertile, those who may be sexually inactive, and those who may have moral reasons not to use contraceptive drugs or devices even if they were available. Typically, reproductive health bill proponents bring up the estimated 473,000 induced abortions done each year as evidence of a huge unmet need for contraceptives. A review of the methodology shows that it contains at least three flaws that overestimates the actual number. Using two approaches, we arrived at the much lower estimates of 25,924 and 20,831 induced abortions done annually (See Appendix 1). We recognize that our estimates do not include the “chemical abortions” that occur when abortifacient contraceptives are used which have the mechanism of preventing implantation of a fertilized egg which is an abortion. The estimates in the appendix refer to abortions made after the fertilized egg has implanted itself in the uterus. Second, unmet need plays a relatively small role in explaining the actual fertility of women. In 1994, Pritchett found that that the “desired levels of fertility account for 90% of the differences across countries in total fertility rates.” In other words, couples have large families because they want large families. It makes perfect sense, for example, that Filipino farmers may want larger families because they want more hands to help them in the farm, as well as children who can take care of them in their old age. 7 The quotation is taken from “Singapore needs young immigrants”, Agence France Presse, 18 January 2011. The news on China is taken from “China plans the end of hated one-child policy”, The Times Online, 28 February 2008.

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